*PIMCO to launch TALF fund in the next 30 days
*PIMCO to invest in core markets, avoid risky debts
*PIMCO seeks QDII, QFII opportunities in China (Adds China business development plans, more details)
SHANGHAI, April 15 (Reuters) - PIMCO, the world’s largest bond fund manager, plans to launch a closed-end asset-backed fund linked to the U.S. asset plan, TALF, in the next 30 days, and is exploring business opportunities in China, its Asia president and director said on Wednesday.
Under the U.S. plan to sop up bad assets now choking bank balance sheets, public-private funds will get opportunities to buy so-called “legacy” securities with a combination of private and government capital, possibly levered up by the government.
PIMCO’s TALF Investment and Recovery Fund will borrow from the Term Asset-Backed Securities Loan Facility, or TALF, to buy securities backed by consumer receivables and loans, and will deliver income flows to investors via interest payments from the purchased assets, Brian Baker told Reuters on the sidelines of a financial conference in Shanghai. For a factbox on U.S. toxic asset plan, double-click on [ID:nN23195140]
“We believe this financial crisis will be resolved by the U.S. and other core financial market rehabilitation. So we want to invest in these core countries where the financial rehabilitation will be led and where policy makers will be most aggressive in addressing the financial crisis,” Baker said.
Over the course of 2008, PIMCO reduced its exposure to emerging markets and won’t start buying such higher-risk credit until it sees more stability in the financial crisis, he added.
PIMCO, the world’s best known bond manager under chief investment officer Bill Gross, had about $15.6 billion of assets under management in Asia as of Dec. 31, 2008. The firm as a whole manages $747 billion, according to the company’s website.
Newport Beach, California-based PIMCO, a unit of Germany's Allianz SE ALVG.DE, made its foray into the Asia ex-Japan market in 1993, and opened offices in Singapore and Hong Kong.
PIMCO is aggressively seeking opportunities in China to help institutional and retail investors to invest overseas, and is also looking at opportunities to invest in China’s domestic capital markets via the Qualified Foreign Institutional Investor (QFII) scheme, Baker said.
Chinese fund houses typically hire foreign fund managers as investment advisers when launching overseas investment products under the Qualified Domestic Institutional Investor (QDII) scheme, which allows Chinese to invest abroad.
In 2006, PIMCO won a mandate from China’s National Social Security Fund, the country’s national pension fund, for the investment of funds in overseas fixed-income products. (Editing by Edmund Klamann)
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